How India’s purchases of Russian oil are reshaping global energy trade

Western sanctions on Russia following its invasion of Ukraine have shifted global energy flows, with India and China emerging as prominent buyers of Russian oil. The question is no longer from whom New Delhi and Beijing will purchase energy, but in which currency they will pay.

Amid warming ties between India and China following US President Donald Trump’s imposition of sweeping tariffs on Indian exports after New Delhi refused to stop purchasing Russian oil, Indian traders are reportedly asking the country’s state refiners to pay for Russian oil in Chinese yuan. This move comes as China and India continue to normalise relations, largely thanks to Trump’s trade policies.

There are, however, fears in Washington that Trump’s actions could further encourage New Delhi to deepen its cooperation with Moscow and Beijing across various sectors. Aiming to prevent such an outcome, a group of 19 US Congress members recently urged Trump to end tariffs on India. Trump’s moves have already led to a deterioration in economic ties between the US and China while effectively helping Beijing increase its influence in Eurasia.

At this point, there are no indications Trump will change course and stop pressuring India to end its energy cooperation with Russia. But even if New Delhi did make a political goodwill gesture to appease Washington and stop purchasing Russian raw materials – which is unlikely – no one can guarantee the US will reduce tariffs.